Realty Income Tops Tech Stocks as Best Dividend Stock for Passive Income

Realty Income (O) stands out as the top dividend stock for investors seeking passive income, according to recent analysis. Unlike tech stocks like Microsoft (MSFT) and Apple (AAPL), which offer growth but lower yields, Realty Income provides a high-yielding monthly income stream with steady growth.

The REIT's mission is to deliver dependable monthly dividends that increase over time, and it has made 674 consecutive monthly dividend payments throughout its history. With a yield of over 5%, Realty Income outshines tech stocks like Microsoft and Apple, which have yields of 0.8% and 0.3%, respectively.

While tech stocks can deliver growth, their current yields are not enough to provide investors with meaningful passive income in the short term. For example, even if Microsoft grows its dividend at a 10% compound annual rate over the next decade, an investor's yield on cost would only be 2.1% in 10 years.

Realty Income, on the other hand, has delivered dependable growth with more frequency than most companies, including tech stocks. The REIT has grown its dividend at a 4.1% compound annual rate since going public and has increased its payout at a conservative 75% of its adjusted funds from operations.

With its high-yielding monthly income stream and steady growth, Realty Income checks all the boxes for a top dividend stock: attractive yield, conservative payout ratio, multi-year track record of payment growth, and strong financial profile.